DESK REVIEWS | 03.02.04. Remittances

DESK REVIEW | 03.02.04. Remittances

See Part 2 (specifically 2.02.08) about the role of remittances in health care.

Remittances in Kenya constituted 2.5% of GDP in 2015. They increased from US $934 million in 2011 to US $1.73 billion in 2016 and at an average of 14.3% in the past one decade (Misati et al., 2018). According to household surveys conducted in Burkina Faso, Kenya, Nigeria, Senegal, and Uganda in 2009 as part of the Africa Migration Project, households in Kenya devoted 7.3%, 5.8%, and 7.0% of outside Africa, intra-Africa, and intraregional remittances to health respectively. Regionally, food was the highest while health was the fifth highest in terms of remittances. Remittances may improve health outcomes through purchase of more food and access to health care, by increasing awareness on proper diet (Mohapatra & Ratha, 2011).  Even though there is no data showing the amount of remittances spent on LTC, it is assumed that the services provided through such remittances cover all life cohorts since some of the factors that motivate sending of remittances include (Jena, 2016):

  1. The need to assist parents in old age
  2. Financing younger siblings
  3. Inheritance motives
  4. Cultural norms and expectations
References:

Jena, F. (2016). The remittance behaviour of Kenyan sibling migrants. IZA Journal of Migration, 5(1), 11. https://doi.org/10.1186/s40176-016-0059-x

Misati, R. N., Kamau, A., & Nassir, H. (2018). Do migrant remittances matter for financial development in Kenya? (WPS/08/18). Financial Innovation. Springer. https://doi.org/10.1186/s40854-019-0142-4

Mohapatra, S., & Ratha, D. (2011). Remittance markets in Africa. The World Bank. The World Bank. Washington D.C. https://openknowledge.worldbank.org/bitstream/handle/10986/2292/613100PUB0mark158344B09780821384756.pdf?sequence=1&isAllowed=y

Similarly, as for health financing, while remittances play an important role in supporting families in many localities throughout the country and they are predominantly provided by the large number of Mexican migrants living in the U.S., the scarce information available shows that these are primarily spent on basic subsistence items such as food and clothing. One of the few studies available on this subject shows that, based on different data sources, the main uses of remittances sent by Mexicans are: buying clothes and groceries. Remittances are used much less frequently to purchase education, health services, settle debts, and for buying, renovating, or building homes (CONAPO & Fundación BBVA Bancomer, 2018).

References:

CONAPO, & Fundación BBVA Bancomer. (2018). Anuario de Migración y Remesas México 2018. https://www.migracionyremesas.org/docs/Anuario_Migracion_y_Remesas_2018.pdf

No, remittances are not relevant for long-term care financing in South Africa.